Saudi stock market index, TASI slips 200 points as the “NEOM” dream fades

Saudi Arabia’s main stock market index, TASI, ended Tuesday’s session, 6 January 2025, down 0.3% to close at 10,291 points (-34 points), marking its lowest close since March 2023—about 34 months—with total trading value of around SAR 3.6 billion.

The index opened at 10,324 points, hit an intraday high of 10,362, and a low of 10,281, according to Saudi reports.

Losses since the start of the year have reached about 200 points, roughly 2%, compared with the 2025 year-end close. Shares of Al Rajhi Bank fell 1% to SAR 95.95.

According to Argaam, shares of Riyad Bank, STC, Saudi National Bank (SNB), Alawwal Bank, ACWA Power, Almarai, BSF, Alinma (Al Arabi), Al Taawuniya, and Tadawul traded lower, with declines ranging between 1% and 3%.

Meanwhile, Saudi Arabia’s Capital Market Authority (CMA) announced that it will open the financial market to all categories of foreign investors, allowing direct investment starting 1 February 2026. The CMA approved a regulatory framework enabling non-resident foreign investors to invest directly in the main market, making Saudi financial markets accessible to a wider range of investors globally.

Arranging an international loan

In a related development, Saudi Arabia finalized a seven-year syndicated international loan worth $13 billion, earmarked to support energy, water, and public-utility projects, as part of the Kingdom’s medium-term public debt strategy.

According to Asharq Business (Economy Asharq), the National Debt Management Center said in a statement that the arrangement falls within efforts to diversify funding sources to meet government financing needs at fair pricing over the medium and long term, while adhering to well-studied risk management frameworks.

The operation, the statement added, aims to leverage market opportunities to implement alternative government financing options, contributing to economic growth, and supporting development and infrastructure projects linked to Saudi Vision 2030.

The loan comes as the Kingdom announced a revision to its budget deficit figures, saying the deficit is expected to reach about $65 billion in 2025—more than double previous estimates—due to higher spending and lower revenues, according to the statement.

Riyadh had expected borrowing to total around $37 billion this year, mostly from capital markets, with about 30% raised through private channels. Fitch Ratings, in a report, said a larger share of future funding is likely to come from sources outside the market, citing Saudi Arabia’s large borrowing needs and risks linked to rising debt issuance costs.

NEOM: an end before the beginning

These developments come after several newspapers—including the Financial Times on 6 November 2025, The Independent on 4 November, and The Times in early November—published high-profile reports resembling an “obituary” for one of the biggest Vision 2030 projects: “The Line” and the broader NEOM project.

The reporting cited the project’s current state after spending at least $50 billion, noting that the desert has been filled with foundation works and deep trenches stretching across the landscape, while employees inside the project believe its success may be impossible. It added that NEOM’s board significantly scaled back the project’s first phase as a way to signal failure to officials without provoking them.

Ismail Youssef said the project resembles “an AI-designed city or a computer game,” and that after massive spending on infrastructure (foundations, tunnels, and services), it became clear that building the city in reality is extremely difficult.

Writer Youssef Al-Oussi argued that the design conflicts with physics theories, citing the Foucault pendulum experiment and claiming that within the building (management offices, meeting rooms, and workspaces) it would sway and move in a circular motion. He said that despite this, the Crown Prince approved the project, even though engineering standards reject such shapes because of Earth’s movement. He added: “If the laws of physics don’t stop this project, then the unprecedented financial deficit will.”

Reports also said the cost of NEOM has surged dramatically, alongside schedule delays and Saudi Arabia’s failure to secure the foreign investment it had been counting on heavily.

As we wrote earlier, somebody just bought EUR 70 million of stocks of Hungary’s largest bank.